Daily Morning Report

Friday, September 27–Jim Wyckoff’s Morning Markets Report

Asian stocks were mostly weaker, while European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.

Slowing global economic growth is in focus late this week. China reported its industrial profits dropped 2% in August, year-on-year. Producer price deflation also deepened in August. Other economic data released from the world’s second-largest economy Friday also showed China’s imports of raw commodities generally declining. The U.S.-China trade war has significantly crimped China’s economic growth.

Meantime, there was more dour economic news coming out of the European Union. The Euro zone September consumer confidence index was reported at minus 6.5 from minus 7.1 in August. Industrial confidence was reported at minus 8.8 in September from minus 5.8 in August.

The world marketplace is seeing risk appetite somewhat blunted by the U.S. House of Representatives considering impeaching President Trump. Whether Trump actually gets impeached seems unlikely at this time. However, the inquiry by the House is very likely to bog down the U.S. government to a standstill on new legislation, and is likely to hurt Trump’s foreign policy agenda.

Nymex crude oil prices are near steady and trading around $56.50 a barrel. The other key outside market today sees the U.S. dollar index trading modestly up and hitting a new high for the year.

U.S. economic data due for release Friday includes personal income and outlays, durable goods orders and the University of Michigan consumer sentiment survey.

–Jim

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Thursday, September 26–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The up-and-down U.S.-China trade rhetoric is presently in “up” mode following positive comments on the matter from President Trump on Wednesday. Then on Thursday China’s Commerce Ministry said Chinese companies will buy “sizeable amounts” of U.S. soybeans and pork ahead of high-level trade discussions scheduled to take place in October.

However, the positive news on the world trade front is being blunted by the U.S. House of Representatives considering impeaching Trump over what the House says are illegal comments Trump made to a Ukrainian official. The Trump administration on Wednesday released the transcript of his comments to the official, which is being spun by both Republicans and Democrats to each’s favor. Whether Trump actually gets impeached seems unlikely at this time. However, the inquiry by the House is very likely to bog down the U.S. government to a standstill on new legislation, and is likely to hurt Trump’s foreign policy agenda, including trade negotiations with China.

Upbeat economic data coming out of Germany is also assuaging European investors late this week. A consumer sentiment report Thursday showed a higher reading in October than in September, and the October number was also higher than expected. Recent economic data coming out of Germany had been dour.

Nymex crude oil prices are slightly up and trading around $56.60 a barrel. The other key outside market today sees the U.S. dollar index trading slightly higher and not far below the high for the year.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of second-quarter gross domestic product, revised corporate profits, the advance economic indicators report, the Kansas City Fed manufacturing survey, and pending home sales.

–Jim

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The U.S. Treasury market bulls have made a solid recovery the past week, following recent selling pressure. Look for more upside price action in U.S. Treasury bond and note futures in the near term. Reason: It appears the political turbulence in the U.S. has significantly increased this week, following the U.S. House’s inquiry regarding impeaching President Trump, and after Trump’s harsh rhetoric in a speech to the United Nations on Tuesday. Stay tuned!–Jim

Wednesday, September 25–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly down in overnight trading. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins.

Traders and investor risk sentiment has up-ticked at mid-week, mainly because of two developments on Tuesday. The first is the harsh rhetoric coming from President Trump in a speech to the United Nations assembly in New York Tuesday morning. Trump slammed China for its unfair trade practices and said the world is no longer embracing “globalization.” Trump said “nationalism” is the new bent among the major countries of the world. Trump’s strong words against China seemingly can’t help but decrease the odds of a substantial U.S.-China trade agreement anytime soon.

The second development Tuesday was that the U.S. House of Representatives is now considering impeaching Trump over what the House says are improper and illegal comments Trump made to a Ukrainian official. Trump responded that he will release the transcript of his comments to the official. Whether Trump actually gets impeached seems unlikely, at this time. However, the inquiry by the House is likely to bog down the U.S. government and could hamstring Trump’s foreign policy agenda, including trade negotiations with China.

Brexit news is near the front burner again after the U.K. Supreme Court ruled that Prime Minister Boris Johnson acted illegally when he suspended Parliament.

Nymex crude oil prices are lower and trading around $56.50 a barrel. The other key outside market today sees the U.S. dollar index trading higher.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, September 24–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Trader and investor attitudes are a bit more upbeat today, but still not close to being full-speed-ahead risk-on.

There’s been a change of thinking in the marketplace regarding last week’s meeting between U.S. and Chinese trade officials in Washington, D.C. Traders initially deemed the early departure back home of China’s trade delegation as a sign the talks did not go well. The Chinese were scheduled to visit U.S. farms, but the visits were abruptly cancelled. However, language coming from both sides since last Friday has been very upbeat and the trade negotiations are set to continue. The marketplace is now reading this situation as a positive for an eventual U.S.-China trade agreement.

The specter of a very anemic European Union collective economy continues to cloud the European marketplace. Dour manufacturing data coming out of Germany Monday suggests the biggest economy in the Euro zone is headed toward recession.

China’s central bank chief on Tuesday said the People’s Bank of China will not follow the monetary-policy-easing paths of the central banks of the West, and that China’s present interest rates are appropriate.

Nymex crude oil prices are lower and trading around $58.00 a barrel. The other key outside market today sees the U.S. dollar index trading slightly up.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, and the consumer confidence index.

–Jim

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The U.S. dollar index is a basket of six major currencies weighted against the greenback. See on the daily bar chart that the USDX remains in a price uptrend and is not far below this year’s high. The dollar bulls remain strong, technically, to suggest more gains in the near term, including pushing to new highs for the year. Stay tuned!–Jim